Cadence Design Systems Inc. (CDNS) Stock

Cadence Design Systems Inc. trades at a P/E ratio of 94.46, which is above the market average of approximately 20. This premium valuation suggests investors expect above-average growth or the company has competitive advantages justifying the higher multiple. Looking ahead, the forward P/E of 51.02 is lower than the current P/E, indicating analysts expect earnings to grow over the next year. The PEG ratio of 3.57 indicates a premium valuation even accounting for growth.

With a beta of 0.97, Cadence Design Systems Inc. is less volatile than the overall market. This means when the market moves up or down by 10%, this stock typically moves less than 10% in the same direction. Lower beta stocks are often preferred by conservative investors seeking stability. The price-to-book ratio of 19.07 shows investors value the company above its book value, which often reflects intangible assets or growth prospects.

Cadence Design Systems Inc. achieves a profit margin of 19.90%, meaning it retains $19.90 from every $100 in revenue after all expenses. This is an impressive margin, indicating strong pricing power and efficient cost management that allows the company to generate substantial profits. The operating margin of 29.30% reveals how efficiently the company runs its core business operations before interest and taxes. With ROE at 21.80% and ROA at 11.70%, the company generates strong returns on invested capital.

Cadence Design Systems Inc.'s revenue grew by 20.20% year-over-year, representing robust expansion that significantly outpaces typical market growth rates. This strong top-line performance suggests the company is successfully capturing market share or benefiting from favorable industry trends. Earnings decreased by 29.80% year-over-year, reflecting the bottom-line impact of business performance. These growth metrics should be evaluated against SERVICES-PREPACKAGED SOFTWARE industry averages for proper context.

Cadence Design Systems Inc. has a market capitalization of $95.49B, classifying it as a large-cap stock ($10B-$200B). Large-caps are typically industry leaders with established business models, offering a balance of stability and growth potential. They often provide dividend income and are core holdings in institutional portfolios. With 272.49M shares outstanding, the company's ownership is relatively concentrated. As a participant in the SERVICES-PREPACKAGED SOFTWARE industry, it competes with other firms in this sector.

Cadence Design Systems Inc.'s book value per share is $18.37, while the current stock price is $343.48, resulting in a price-to-book (P/B) ratio of 18.70. This high P/B ratio indicates significant intangible assets, strong brand value, or high growth expectations. Technology and consumer brand companies often trade at elevated P/B ratios due to intellectual property and competitive advantages not reflected on the balance sheet. As a common stock, this represents equity ownership with voting rights.

23 analysts cover CDNS with 78% recommending buy/strong buy ratings. Analyst predictions have mixed reliability - studies show consensus rarely beats market returns consistently. The strong bullish consensus may already be priced in. The consensus target of $369.57 implies 7.6% upside, but targets are often adjusted to follow price moves rather than predict them.

Current analyst recommendations:4 Strong Buy, 14 Buy, 4 Hold, 1 Sell, 0The bullish tilt suggests optimism about future prospects, though investors should conduct independent research.Remember that analyst opinions often lag price movements and can be influenced by investment banking relationships.

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